Alphabet-owned Sidewalk Labs abandoned its smart city development project in Toronto due to economic uncertainty and Toronto's distressed real estate market, according to a Medium post from the company's co-founder and CEO Dan Doctoroff.
The 12-acre development in Toronto was intended to serve as a testament to the promise of smart city technology — Sidewalk Labs committed over $3.9 billion in funding to build its vision of a "climate-positive," affordable, public transit-friendly community.
However, in 2019, Sidewalk Labs had to scale down its ambitions, as the plans were met with criticism from locals concerned about privacy, according to The Globe and Mail.
The abandonment of Sidewalk Lab's Toronto development signals a downturn in smart city spending as municipalities cut budgets.
Cities are struggling to institute emergency measures to protect against the spread of the coronavirus, while also contending with what will likely be a drop in the tax base due to the economic downturn.
More than 2,100 US cities anticipate they will have budget shortfalls in 2020, which will lead them to cut programs and reduce staff, according to The Washington Post.
Because smart city projects tend to arise out of public-private partnerships between municipalities and privacy companies, cities will be spending less on these initiatives, which could last for years given the extent to which unemployment has soared in April.